Investing in Women in Business – Gender Lens Investing

Look at Your Investments Through a “Gender Lens” to Address Gender Inequality

Investors are increasingly looking to make a positive impact with their dollars. US SIF: The Forum for Sustainable and Responsible Investment issued a recent report that shows sustainable, responsible, and impact investing is on the rise, now accounting for $8.72 trillion in assets, or one in five dollars invested under professional management in the United States.

The report reveals that “gender lens investing” is of increasing interest. To learn more about gender lens investing and what it seeks to achieve, I spoke with Lisa Woll, CEO of US SIF.

What Is Gender Lens Investing?

In gender lens investing, investors evaluate investment opportunities based on how they support women’s access to capital, women in the workplace, products that help women and girls and organizations that assist women living in poverty or under-served communities, among other areas.

What Do Investors Hope to Achieve with Gender Lens Investing?

Gender lens investors seek to address gender inequality while at the same time benefiting from investment returns.

Numerous studies have shown that diverse companies and diverse boards—those with a high representation of women board directors—achieve higher financial performance, on average, than those with low representation of women board directors.

As Sallie Krawcheck, CEO of the Ellevate Network, often says, “Investing in women is simply smart business.” Moreover, a report by McKinsey Global Institute found that advancing women’s equality could add $12 trillion to global GDP by 2025.

How Can Individuals Invest with a “Gender Lens?”

Individuals who invest in specific stocks can look at the makeup of a company’s board to see if it is inclusive of women.

There are also a number of gender lens mutual funds and other investment products available to individual investors through financial institutions. In addition, there are many mutual funds and investment products not specifically labeled as “gender lens,” that still take into account board diversity, fair employment, labor rights, human rights, and other issues that benefit women. US SIF provides a list of publicly-available mutual funds on its website, as well as an “Investing to Advance Women” guide.

Finally, companies such as Morningstar and MSCI now offer ratings that evaluate investment vehicles based on environmental, social and governance factors, including gender diversity on boards.

Can You Share Examples of Gender Lens Investing in Action?

Calvert Foundation’s Women Investing in Women Initiative (WIN – WIN) enables individuals to invest as little as $20 to support organizations and social enterprises that help empower women. Since it launched in 2012, the initiative has raised more than $20 million for women’s advancement globally in a range of areas, including affordable housing, microfinance and healthcare.

In addition, institutional investors and fund managers representing $3 trillion in assets, along with representatives of some of the nation’s leading women’s organizations, have banded together in the “Thirty Percent Coalition” to urge publicly traded companies to explicitly set gender diversity as a key criterion of their nominating committee charters and director searches. As its name suggests, the group wants to see women fill at least 30 percent of corporate board seats.

Since its founding in 2012, the Coalition has seen some progress, though it falls far short of the goal. According to annual indexes published by executive search firm Spencer Stuart, in 2016 women filled 21 percent of the board seats of the S&P 500, up from 17 percent in 2012.

As a result, a number of sustainable investors—including public and labor funds, investment firms, and religious institutions—continue to file shareholder proposals at companies whose shares they own, requesting that the companies make a formal commitment to increase board diversity.

An Opportunity to Make an Impact

As these examples show, if you’re looking to address gender inequality in the workplace and society, you have an opportunity to make a difference – by investing your hard-earned dollars with funds that make equal employment opportunity, board diversity, and women’s advancement a priority.

 

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